JAKKS Pacific, Inc. Faces Lawsuit
Toymaker JAKKS Pacific Inc. is being accused of and investigated for securities fraud by Faruqi & Faruqi, LLP, a leading national securities law firm. They are looking for investors to discuss their legal rights for those who invested in JAKKS stock or options between July 17, 2012 and July 17, 2013. They are also encouraging anyone with information regarding JAKKS’ conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
The investigation is about whether JAKKS Pacific and its executives violated federal securities laws by failing to disclose so important information. That information included that the shift of children’s interests in electronic games was having an impact on the company’s toys and that those poor toy sales were having a heavy negative impact on the Company’s licensed toy properties.
After the market closed on July 17, JAKKS slashed the company’s full-year forecast for revenues and earnings. The company cited poor sales caused by a shift in children’s playing choices in favor of electronic devices. The company also said that it would suspend its dividend and implement a major restructuring and downsizing plan. Due to this disappointing news, JAKKS shares fell $4.48 or approximately 39% percent from a close of $11.48 per share on July 17, 2013, to a close of $7.00 per share on July 18, 2013.
I don’t see how anyone wouldn’t see this coming. All one has to do is walk into a Toys R Us to see this trend or do some basic research online.